Mercury Mobility and m.Net to merge

Stuart Corner
Monday, 07 September 2009 12:56

IT Industry - Strategy

ASX listed mobile content specialist, Mercury Mobility (ASX: MMY) is to merge with m.Net Corporation to produce "a new generation of mobile expertise and capabilities, targeting global mobile carriers, media companies and content and brand owners," and with their respective shareholders each holding about 50 percent of the merged entity.
 

m.Net will bring a bunch of significant shareholders to the merged entity. Its shareholders are Yahoo!7, through its wholly-owned subsidiary Yahoo Digital Media (Content), Alcatel-Lucent Australia, Telstra and CVC Limited. The three major shareholders have agreed not to sell their shares on market for a six month voluntary escrow period from completion.

Horden Wiltshire, currently CEO of m.Net, will become the CEO of the combined company and Mercury Mobility's founder and managing director, Ben Grootemaat, will become an executive director of the merged entity.

"The mobile market is growing very quickly and the merger positions us to take advantage of the rapidly emerging opportunities in the industry. Combined we have an enviable client list and our two workforces now become part of a larger, stronger organisation", said Wiltshire.
 
Grootemaat said the combined businesses would capture a clear leadership position in the Australasian digital media market by leveraging competitive competencies between the mobile entertainment market and the mobile advertising market. "The combination of Mercury's existing business in Canada combined with m.Net's work with Yahoo! in North America will provide us with a strong foothold to further expand in the North American marketplace."
 
The agreement was signed by the three major shareholders of m.Net (Yahoo!7, Alcatel-Lucent and Telstra), but is conditional upon m.Net's minority shareholders agreeing to sell their m.Net shares to Mercury at completion.
 
The merger will be effected through Mercury's acquisition of all of the shares in m.Net and is conditional upon Mercury's shareholders. approving the deal at a general meeting to be held in October 2009. Mercury expects to issue the m.Net shareholders with a total of approximately 105 million fully paid ordinary shares. Following completion of the acquisition, Mercury's current shareholders and m.Net's current shareholders are expected each to hold approximately 50 percent of Mercury's issued capital.
 
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